The Japanese yen dropped against its key counterparts during the European session on Friday amid risk appetite, as a sharp acceleration in economic growth in China and a surge in U.S. retail sales suggested that the global economic recovery is gathering pace.

Official data showed that China's gross domestic product expanded 18.3 percent year-on-year in the first quarter of 2021.

That was shy of estimates for a jump of 19.0 percent but was up sharply from the 6.5 percent growth in the fourth quarter of 2020.

Industrial production was up an annual 14.1 percent in March - missing forecasts for a gain of 17.2 percent and slowing from the 35.1 percent growth in February.

Retail sales skyrocketed 34.2 percent year-on-year in the month, exceeding expectations for a gain of 28.0 percent and up from 33.8 percent in the previous month.

Fixed asset investment jumped an annual 25.8 percent, beating forecasts for 25.0 percent while the jobless rate fell to 5.3 percent from 5.5 percent in February.

U.S. retail sales rose the most since May 2020, while first-time claims for unemployment benefits fell to the lowest level since March 2020, in a sign that the recovery remains on track.

Market participants await the release of U.S. housing starts, building permits and consumer sentiment index later in the day for more direction.

The yen weakened to 108.96 against the greenback and 150.01 against the pound, off its early high of 108.61 and a fresh 3-week high of 149.39, respectively. The yen is seen finding support around 111.00 against the greenback and 152.00 against the pound.

The yen edged down to 130.54 against the euro and 87.06 against the loonie, reversing from its early 3-day high of 129.98 and an 8-day high of 86.56, respectively. The yen is likely to challenge support around 133.00 against the euro and 88.00 against the loonie.

The yen touched a 3-day low of 118.63 against the franc, after rising to 117.73 at 5:00 pm ET. Further decline in the currency is likely to see support around the 119.00 level.

The yen ticked down to 84.37 against the aussie, compared to its previous high of 84.08. On the downside, 88.00 is possibly seen as its next support level.

In contrast, the yen rose back to 77.86 against the kiwi, off its prior low of 78.03. If the yen extends rise, 76.00 is possibly seen as its next resistance level.

Looking ahead, at 8:15 am ET, Canada housing starts for March will be published.

Canada wholesale sales for February and U.S. housing starts and building permits for March, as well as University of Michigan's preliminary U.S. consumer sentiment index for April are due out in the New York session.

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